Tab for Children's new hospital exceeds $1 bil.

(Crain's) -- The price tag on Children's Memorial Hospital's proposed replacement facility in Streeterville has crept above $1 billion, according to an application it filed recently with state health regulators.

The cost estimate for the 288-bed facility continues to climb: Officials pegged the cost at $850 million last month when celebrating the news that philanthropist Ann Lurie would donate $100 million toward the project. The $1-billion figure is 33% higher than the $750-million estimate hospital officials first cited when announcing the planned relocation in April 2006.

A spokeswoman said Wednesday that officials were not surprised by the increased cost estimate. She blamed it on rising construction and borrowing costs and contingencies that were built into the final proposal.

The hospital got a break on acquiring the building site: Northwestern Memorial Hospital sold Children's the 1.8-acre parcel for $10, according to a quitclaim deed included in the state application.

In its 479-page application to the Illinois Health Facilities Planning Board, Children's said it expects to start work on the 22-story facility next spring and move operations from its existing campus to the new building in July 2012.

The application details how Children's plans to pay for the new facility: $430 million in debt, $346 million in cash and securities and $248 million in donations (including the Lurie gift).

The hospital's board last year decided to relocate from its cramped campus in Lincoln Park to the new site at Chicago Avenue and North Fairbanks Court.